Where the Jobs Are
Three major sectors of the labor market have added jobs since the recession began in December 2007: health care and social assistance (+495,700), educational services (+97,100) and government (+244,000).
The health care and social assistance sector is recession-resistant, although not recession-proof. This sector has lost jobs in only four isolated months since 1990. Two trends are driving this expansion: the aging of the baby boom generation (older Americans visit doctors more often) and the development of new options for treatment of medical conditions, resulting in more doctor visits per capita among all age groups compared with 10 years ago. Growth in this sector is fueling demand for space in medical office buildings and related facilities.
The educational services sector is growing as laid off workers seek retraining. The total square footage of office leases signed by educational services tenants slipped by 8 percent in 2008 compared with 2005, whereas the recession drove overall office leasing activity down by 63 percent during this period. This sector will continue to expand well beyond the recession; the school-age population will grow briskly in the next decade, filling seats in primary and secondary schools, colleges and universities, and all types of technical and trade schools. Some of this expansion will generate demand for space in office, industrial and even retail buildings.
Lastly, government hiring is focused at the federal level since the recession has eaten into tax revenues collected by state and local governments, many of which are required by statute to balance their budgets. The $787 billion American Recovery and Reinvestment Act and the Obama administration’s $3.6 trillion budget for fiscal year 2010 will continue to fuel hiring by government agencies, which will create some level of demand for office space in Washington, DC and other areas with federal offices.
Have a great weekend.
Best regards,
Bob
Robert Bach
SVP, Chief Economist
Grubb & Ellis
312.698.6754
